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Moderator Role of Financial Leverage in the Relationship of Asymmetric Information and Firm Value: An Application on BIST (Asimetrik Bilgi ve Firma Değeri İlişkisinde Finansal Kaldıracın Düzenleyici Rolü: BİST Üzerine Bir Uygulama)

Author

Listed:
  • Nur, Tugba

    (Sirnak University)

  • Korkmaz, Turhan

    (Mersin University)

Abstract

This study aims to investigate the relationship between asymmetric information and firm value in companies traded in Borsa Istanbul (BIST) Food and Retail sector and whether financial leverage has a moderator role in the relationship between asymmetric information and firm value by panel data analysis method. The asymmetric information variable was measured with the analyst forecast distribution, analyst forecast error, and the dummy variable, which is formed according to the analysts' estimates of returns per share, whether the distribution is greater or less than the median forecast of the sector. In order to investigate whether the financial leverage variable has a moderator role in the effect of asymmetric information on firm value, moderator variables such as asymmetric information x financial leverage were created. As a result of the analyzes carried out for the period of 10.06.2019-28.03.2022 using weekly data, it has been determined that asymmetric information negatively affects firm value and financial leverage has a limited moderator role on this effect. Although the findings obtained in the study are important for the decisions to be made by current and potential shareholders and managers, it can be said that the limited moderator role of financial leverage on asymmetric information should be taken into account.

Suggested Citation

  • Nur, Tugba & Korkmaz, Turhan, 2022. "Moderator Role of Financial Leverage in the Relationship of Asymmetric Information and Firm Value: An Application on BIST (Asimetrik Bilgi ve Firma Değeri İlişkisinde Finansal Kaldıracın Düzenleyici R," Business and Economics Research Journal, Uludag University, Faculty of Economics and Administrative Sciences, vol. 13(3), pages 449-463, July.
    • Handle: RePEc:ris:buecrj:0605
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    More about this item

    Keywords

    Asymmetric Information; Firm Value; Financial Leverage; Panel Data Analysis; BIST;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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